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Democrats and the Deficit: The Intraparty Fight Ahead

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Alexandra Ocasio-Cortez, the 28-year-old Democratic Socialist who stunned the political world and roiled the Democratic Party this month by defeating Rep. Joe Crowley (D-NY) in a primary, believes in the power of government spending. And her views on the budget deficit “could be a huge asset for Democrats” if or when she wins a seat in Congress this November, writes Business Insider’s Pedro Nicolaci da Costa:

This is her key insight: Despite quack economists' insistence to the contrary, the US government is nothing like a household. It is not ‘burdened’ by debt. It can borrow indefinitely, as long as that borrowing does not spur inflation. What matters, really, is the quality of the spending, not the size of the deficit.

Ocasio-Cortez, who has a bachelor’s degree in economics from Boston University, supports Medicare for All, a federal jobs guarantee and tuition-free public college and a one-time federal cancellation of student debt.

The key quote: "The idea that we're going to austerity ourselves into prosperity is so mistaken, and honestly I feel like one of the big problems we have is that, because Democrats don't have a deep understanding of or degrees in economics, they allow Wall Street folks to roll in the door and think that they're giving them an education," Ocasio told In These Times last month.

Why it matters: Democratic leaders criticized the deficit-increasing effects of the GOP tax cuts and have sought to portray their party as fiscally responsible, with House leaders Nancy Pelosi and Steny Hoyer pledging to adopt a “pay as you go” rule if they win back the House in November. But the progressive wing of the party wants to pursue an ambitious agenda, and Ocasio-Cortez’s views on spending and the deficit are just the latest indication of the intraparty fight Democrats face, especially as they look to 2020.

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.